Adolescent smoking is of particular interest from both a research and a policy perspective because smoking initiation and early smoking habits are known to have important implications for lifetime smoking and can have important negative health consequences for an individual. The earlier in life a youth begins smoking, the more cigarettes he/she will smoke as an adult with greater incidence of negative health effects. Despite a considerable body of research on the effects of tobacco control policies on youth smoking, important research and policy questions remain. There is little evidence to determine whether the effect of tobacco control policies is to prevent smoking initiation, escalation to regular smoking, or promote smoking cessation. The primary goal of this study is to investigate the relationship between cigarette excise taxes and tobacco control expenditures and smoking initiation, prevent escalation to regular smoking, and cessation using the NLSY97, a nationally representative panel of youth. The specific aims of this study are to (1) estimate the effect of cigarette excise taxes and tobacco control expenditures on the probability that an adolescent (a) initiates smoking, (b) starts smoking regularly (escalates), and (c) who smokes, quits; and (2) investigate the possibility of differential effects of the excise tax and tobacco control expenditures by gender and by race/ethnicity for smoking initiation, escalation, and cessation. A discrete-time hazard model is used to estimate the effect of the excise tax and tobacco control funding on the probability that an individual initiates smoking, escalates to regular smoking, and, if a smoker, quits smoking. The panel data and the discrete-time hazard model allow for the control of unobserved individual and state-level effects.